The world depends on the energy sector to provide the essential fuels, chemicals, oils, and equipment necessary to heat and illuminate our houses, keep cars and public transportation moving, and manufacture the products we use every day. In logistics, not every transportation provider works with the oil and gas industry. In fact, the vast majority of companies have no experience or interest in working with the energy sector. Those that do might lack the equipment to haul extremely large or heavy equipment like wind turbines and refinery equipment, or have the tanker endorsements needed to transport bulk and liquid oils. Or maybe they lack the carrier density or operations team necessary to manage and oversee the transportation requirements to fulfill large companies' entire supply chain needs. Oil and gas logistics is a very specialized niche in the industry.
This article offers a comprehensive overview of energy logistics, discussing some of the complexities that companies face on a regular basis and offering some strategies and solutions to overcome some of the common obstacles shippers face within their supply chain.
Common Challenges Faced Within the Oil and Gas Industry
There is certainly no shortage of supply, demand, or financial market share in the oil and gas industry. According to IBISWorld, one of the leading industry research firms, the U.S. market size of oil and gas extraction revenues eclipsed $730bn in 2023. That total is expected to decline about 8% this year, but overall has remained substantially elevated since 2020, as world economies have recovered from pandemic levels. Yet, the industry still faces uncertainty and is subjected to a variety of supply chain disruptions and large-scale economic factors that the logistics industry as a whole experiences on a daily basis.
Visibility and Communication
Like so many other shippers in the logistics industry, communication and supply chain visibility remain at the forefront of some of the significant challenges shipping managers face when it comes to getting their product from A to B. The major difference with oil and gas logistics, though, is the hazardous commodities being transported, which adds an extra degree of difficulty, caution, and concern when the load is being transported. The energy sector knows especially how dangerous it is to transport volatile liquids and gas, which makes this sector all that more critically important. Oil and gas companies want to partner with logistics providers with experience shipping in the oil, gas, and chemical industries. On top of that, they want to ensure that every load being transported has real-time visibility to prevent any potential supply chain disruptions and ensure that energy shipments are delivered on time and in full.
Tanker Endorsements and Compliance
Truck drivers have dangerous jobs regardless of the load being hauled. However, transporting bulk commodities like oil, gas, and chemicals is especially dangerous for drivers on the road and all in their path. Federal and state governments require commercial truck drivers to hold tanker endorsements and a special certificate to legally transport hazardous liquids and gasses. After all, hauling tens of thousands of flammable liquids sloshing around at high speeds is essentially like transporting a cruise missile, if you think about it.
The Federal Motor Carrier Safety Administration requires all truck drivers who transport liquid or gas in a tank vehicle to obtain a tanker endorsement. Considering the vast array of equipment and commodities that are transported within the energy sector, it is important for oil and gas companies to partner with a transportation provider that has built a dense network of nationwide and cross-border carriers that meet the compliance and tanker endorsements required by local, state, and federal regulations.
The vast majority of shippers operate their day-to-day operations with relatively limited oversight beyond the individual communication sent through emails and phone calls between transportation service providers and their operations representatives. Data is also usually siloed within bloated email servers of individual logistics coordinators who oversee the steady volume of shipments that occur each week.
That shipping data is usually manually tabulated into internal databases, including updating load notifications, load specifications and paperwork, tracking and tracing updates, and invoicing documents. One of the major challenges with this approach is that companies are increasingly fragmented across work environments and multiple offices, databases, and data streams, making it difficult for all parties to have access to all the shipping data available for particular loads. This can become problematic, especially when considering the energy sector, as these shipments are not only critically important for delivery but also fragile to the utmost. This approach also limits how the oil and gas sectors can gain transparency over their supply chain.
With technologies available that seamlessly integrate into existing internal tech stacks, Wicker Park Logistics offers energy companies TMS Enabled Visibility that streamlines all supply chain data, empowering shipping managers to have more control over their supply chain.
Capacity and Equipment
One of the common problems shared by shipping managers within the energy sector is that few transportation providers have developed the carrier density adequate to provide on-demand capacity sourcing.
Companies like Wicker Park Logistics have technology that helps oil and gas shippers immediately access a nationwide market of carefully vetted carriers with certificates to haul hazardous liquids, gas, oils, and other materials. Transporting freight in the oil and gas industry means carrying gas, fluids, bulk cargo, and heavy machinery across the country. The green energy sector also commonly needs over-dimensional or specialized transport for moving wind turbines and solar panels.
Wicker Park Logistics specializes in chemical shipping within the oil and gas industry, making them a primary carrier for companies that transport hazardous materials. Through the power of technology, Wicker Park Logistics offers customers access to a digital platform that provides on-demand capacity sourcing for all national and cross-border freight, providing the energy sector with year-round capacity when they need it most.
Reducing Transportation Costs
Maximizing profits is the key to any successful business. In the energy sector, transportation costs are impacted by seasonal fluctuations in the trucking market, economic inflation, political affairs and international conflicts, and crude oil prices. Companies also incur additional costs related to accessorial fees, poor route optimization, and late delivery orders. However, through the power of automation and advanced data analytics, Wicker Park Logistics is helping oil and gas companies lower their transportation costs. Shipping managers can visualize their shipping data by integrating TMS-enabled software into their internal systems. Through a consultative approach, Wicker Park Logistics creates a roadmap for their customers to find ways to optimize routes, reduce detention fees, and improve on-time delivery while maintaining a high standard of safety.
Let Wicker Park Logistics Help Support Your Supply Chain
Each day, hundreds of shippers within the oil, gas, and chemical sector depend on Wicker Park Logistics to provide a range of services that helps the energy industry connect their supply chain to their North American customers. Its dedicated team of logistics experts has decades of experience managing the unique operational requirements of each customer within the energy sector. Whether it's bulk, liquids, oils, over-dimensional, or specialized transport, Wicker Park Logistics has built a carefully vetted carrier network with the compliance and endorsements necessary to haul across the U.S. and into Canada and Mexico. Safety and transparency are Wicker Park Logistics’ top priorities. Talk to an expert today to see how Wicker Park Logistics can support your company.